The Federal Reserve meets on Wednesday in the midst of heavy selling in stock and bond markets following May data showing U.S. consumer prices rising at their fastest pace since 1981. A 75 basis point hike would be the biggest since 1994.
"The markets are not waiting for Wednesday's [Fed] meeting, they are going to front run them and that's what is already happening in the markets today," said Jim Paulsen, chief investment strategist at the Leuthold Group. Standard Chartered said in a Monday note that while it expected a half-point rise this week, it did not preclude larger increases of 75 basis points or even a full percentage point.
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